ASX to Replace Legacy Clearing and Settlement System With Distributed Ledger

Ricardo Esteves

Ricardo Esteves has seen business and economics through many lenses. He joined the Financial Services Industry in 2009, and has been a financial journalist since 2011. He holds a degree in Business Administration and has experience producing real-time news, from both buy-side and sell-side, as well as for retail traders, brokers and service providers. Esteves' work has appeared in a variety of online publications including FX Street and FinanceFeeds.

ASX to Replace Legacy Clearing and Settlement System With Distributed Ledger

August 28, 2019

Distributed LedgerDigital Asset’s DAML, the new system to replace ASX’s equities clearing and settlement system is being progressively deployed within ASX’s Customer Development Environment. ASX is on-track to go-live with the new DLT-based system in March-April 2021. The operator is also looking to provide DLT solutions to customers in Australia and New Zealand.

The Australian Securities Exchange (ASX) will be working on distributed ledger technology (DLT) initiatives in Australia and New Zealand together with Digital Asset (DA), a world leader in DLT and creator of DAML, and VMware, an NYSE-listed server virtualization software provider.

A three-party memorandum of understanding (MOU) signed by the parties will result in DA and VMware supporting the development of ASX’s distributed ledger offering, including the application to replace CHESS (ASX’s equities clearing and settlement system), the support of DAML (the open-source smart contract programming language used to build distributed applications), and
the provision and support of the distributed ledger and associated infrastructure, which delivers ASX’s data privacy, confidentiality and security requirements at a greater scale.

ASX is replacing CHESS with Digital Asset’s open-source DLT software DAML, which will allow the exchange to create new services and innovations beyond clearing and settlement, such as providing and supporting DLT solutions to other customers in Australia and New Zealand.

Peter Hiom, Deputy CEO at ASX, said: “This new partnership is a very positive development that will help us support a wider range of DLT solutions developed by the industry. It confirms our belief in the potential of DLT as we remain on track to deliver the CHESS replacement system in March-April 2021.”

Yuval Rooz, co-founder and CEO of Digital Asset, added: “We continue to achieve our milestones to deliver a production-grade, scalable distributed ledger solution for CHESS. VMware is now part of the mission we share with ASX to deliver a DAML-based distributed infrastructure to realize the full potential of this technology.”

David Tennenhouse, Senior Vice President and Chief Research Officer at VMware, commented: “Providing a state-of-the-art DLT-based system will create new business opportunities for the industry. We’re working closely with DA and ASX on a combined offering to provide the enterprise-grade foundation for ASX, and we look forward to expanding our relationship.”

In May 2019, the exchange opened the Customer Development Environment (CDE) for its new equities clearing and settlement system to replace CHESS, which is based on distributed ledger technology (DLT). Customers can connect to the new system directly via a DLT node, which provides access to real-time, synchronised, source-of-truth data.

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